NOTICE

CONCLUSION OF THE PRIME MINISTER AT THE MEETING OF STANDING COMMITTEE OF THE GOVERNMENT ON THE DRAFT POLICY ON DEVELOPMENT OF SOLAR POWER IN VIETNAM, APPLICABLE FROM JULY 01, 2019 IN THE FURTHERANCE OF THE PRIME MINISTER’S DECISION NO. 11/2017/QD-TTG DATED APRIL 11, 2017

On November 13, 2019 at Government Office, the Prime Minister Nguyen Xuan Phuc chaired the meeting of Standing Committee of the Government on the draft mechanism for development of solar power in Vietnam, applicable from July 01, 2019 in the furtherance of the Prime Minister’s Decision No. 11/2017/QD-TTg dated April 11, 2017 (hereinafter referred to as Decision No. 11/2017/QD-TTg). The meeting was attended by Deputy Prime Ministers Truong Hoa Binh, Pham Binh Minh, Vuong Dinh Hue, Trinh Dinh Dung; senior representatives of the Ministry of Industry and Trade, the Ministry of Finance, the Ministry of Justice, the Ministry of Planning and Investment, the Ministry of Natural Resources and Environment, the Ministry of Agriculture and Rural Development, the Ministry of Construction, Government Office, and Vietnam Electricity (EVN). After listening to the report of the Ministry of Industry and Trade (MoIT) and EVN, comments of the participants and the Deputy Prime Ministers, Prime Minister Nguyen Xuan Phuc, on behalf of the Standing Committee of the Government, came to the following conclusion:

1. In order to ensure supply of electricity in association with environmental protection and sustainable development facing the fact that domestic fossil resources such as coal, oil and gas are limited, the Government has been encouraging development of renewable energy in Vietnam, especially solar power. The PM has signed and promulgated  the Strategy for Development of Renewable Energy in Vietnam by 2030 with a vision towards 2050, which is promulgated together with Decision No. 2068/QD-TTg dated November 25, 2015; the Mechanism for Encouragement of Solar Power Development in Vietnam in Decision No. 11/2017/QD-TTg, which aim to achieve of long-term objectives of the strategies for renewable energy development in a manner that is appropriate for the country’s potentials; ensure overall efficiency, make the best use of land while minimizing use of forest land; avoid causing major impacts to electricity prices; ensure harmony of the State, investors and the people.

A large number of domestic investors from various economic sectors and foreign investors have been investing in solar power projects. The report of MoIT and EVN shows that investment in solar power projects are practical; the power plants that have been completed and in operation are large in scale (about 4.500 MW) with fast and safe construction. This contributes to environmental protection and ensures adequate power supply for socio-economic development and domestic use.

The outcomes are consider by various Ministries as positive as new power sources are added to the national electricity system in a timely manner while many other major sources are behind schedule, especially some major coal-fired thermal power plants. However, there are still weaknesses. To be specific: (i) The additional power is much greater than the Electricity Planning VII while the proportions of existing power sources in the national electricity system are not fully estimated and updated by MoIT. The development of the national solar power planning is sluggish, fails to meet overall administrative requirements for solar power development. (ii) The management of solar power development planning by MoIT is not scientific and practical; the forecasts are inaccurate; (iii) There are currently solutions for effectively and timely control of mass investment in solar power development, especially over-investment in certain areas. This causes great difficulties to transmission, puts heavy load on power plants, affects the operation of the national electricity system as well as investors’ interests; (iv) The investment management is not transparent, strictly controlled and harmonious.

MoIT needs to eliminate these weaknesses, improve transparency and efficiency of management in development of solar power as well as other renewable energies in the future.

2. The Government will keep encouraging reasonable development of renewable energy, especially solar power, which has great potential in Vietnam. However, the proportions of various types of power sources must be scientifically and methodologically calculated. Bidding shall be made mandatory; direct contracting shall be forbidden. Focus on finalization of finished and unfinished projects that cannot be put into operation before July 01, 2019 in order to make the best use of investment sources.

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- Focus on areas with advantages and potentials for development to ensure overall efficiency; prioritize development of rooftop photovoltaic power systems, which do not occupy lands, and investment in the transmission grid; consider long-term achievement of strategic objectives; ensure a rational pace development in each time in association with environmental protection.

- Solar power development shall comply with existing planning, maintain the balance of the electricity system; avoid rapid development which might affect the generation costs of the entire electricity system; ensure harmonious interests of the State, investors and the people; fight corruption and interest groups in development management; eliminate direct contracting; do not use technologies that are obsolete, inefficient or environmentally unsafe.

- Do not retrospectively apply regulations on electricity prices to the solar power projects that are applying the feed-in tariff (FIT) under Decision No. 11/2017/QD-TTg; facilitate reasonable development and protect lawful interests of investors.

- Apply FIT to rooftop PV systems nationwide over a specific period of time. Consider setting an FIT applicable to ongoing projects that already have power purchase agreements (PPA) that are planned to be put into operation in 2020. Apply open and competitive bidding to other projects and new projects instead of applying FIT in order to reduce electricity buying prices from solar power projects.

- Solar power prices applied to the projects in Ninh Thuan province shall comply with the Government’s Resolution No. 115/NQ-CP dated August 31, 2018 on implementation of special policies to assist Ninh Thuan in socio-economic development, stabilization of production and life during 2018 – 2023 until the total generation capacity of Ninh Thuan province reaches 2.000 MW or until 2020, whichever comes first. MoIT and Ninh Thuan province shall strictly follow these instructions.

4. On the basis of the aforementioned orientations and rules, MoIT shall take charge and cooperate with the Ministry of Finance and EVN in performing the following tasks and submit a report to the PM before December 15, 2019:

- Review and uniformly apply the FIT to rooftop PV systems; make sure it is not taken advantage of for profiteering (ensure the maximum power is reasonable, etc.).

- Only the FIT to ongoing projects that already have PPAs and are planned to be put into operation in 2020 (check the enclosed lists). MoIT shall cooperate with relevant authorities in reviewing and reporting the list of solar power projects eligible for the new FIT; take responsibility to the PM for the accuracy of the list; ensure fairness, openness and transparency.

- Establish a uniform mechanism for solar power bidding and submit it to the PM for promulgation, which will be the basis for execution of the remaining projects and new projects.

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6. MoIT shall:

- Take charge and cooperate with Commission for Management of State Capital at Enterprises, EVN, other Ministries, agencies and local governments in thoroughly resolve the issues relevant to overload of solar power plants in operation; accelerate the development of the grid to fully transmit power generated by the solar power plants being in commercial operation as per regulations. Make sure power plants do not resort to generation cut, which is a waste of resources and may cause damage to investors, especially while power supply is recently facing difficulties.

- Promptly and actively resolve the issues of the thermal power plant projects that are behind schedule to put them into operation; promptly report the issues beyond their jurisdiction to the Prime Minister.

- Keep reviewing relevant regulations of law, studying the mechanism for investment in the transmission grid towards allowing non-state investments to ensure harmony between investment in renewable energy sources and the grid, thus achieve overall effects; submit a report to the Prime Minister in November 2019.

- Accelerate the formulation of the National Planning for Electricity Development 2021 – 2030 with a vision towards 2045 (Electricity Planning VIII). The Planning shall be scientific, ensures reasonable proportions of power sources, transmission capacity and competitiveness of the electricity market; encourages reasonable development of renewable energy, thrifty and effective use of land and water surface. The Planning shall be submitted to the Prime Minister for approval in 2020.

7. National Steering Committee for Electricity Development shall frequently hold meetings to give instructions and resolve issues to accelerate the progress of key and urgent projects.

8. Relevant ministries and authorities shall not evade responsibility, especially for projects facing difficulties, in order to accelerate their progress. Power shortage will not be acceptable. Ensure conformity with law; prevent corruption and interest groups; ensure transparency and openness of all aspects.

For your information and compliance./.

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PP MINISTER AND CHAIRPERSON
DEPUTY CHAIRPERSON




Nguyen Cao Luc

Thông báo 402/TB-VPCP năm 2019 kết luận của Thủ tướng Chính phủ Nguyễn Xuân Phúc tại cuộc họp Thường trực Chính phủ về Dự thảo Cơ chế khuyến khích phát triển điện mặt trời tại Việt Nam, áp dụng từ ngày 01 tháng 7 năm 2019 tiếp theo Quyết định 11/2017/QĐ-TTg do Văn phòng Chính phủ ban hành